It looks to be official. According to claims first made by Politico, and now through a U.S. official statement via the Associated Press, the Biden administration will once again extend the student loan payment pause. With a push from Democrats in Congress, the extension will allow federal student loan borrowers to continue the no-payment status-quo through the end of the summer.
The original student loan payment pause was first enacted at the beginning of the COVID pandemic in March 2020 by former President Donald Trump. Biden, however, has now extended the measure four times. Before the big announcement today, the payment pause was set to expire after May 1st. With just weeks away from requiring some 37 million student loan borrowers to once again make payments on the loans, reports of worried Americans not sure of how they were going to be able to make payments were seen across major media outlets. Insider recently reported that nearly all borrowers across the nation reported that they were not prepared for the student loan payment pause to end.
It wasn’t only the borrowers themselves that were concerned about the student loan payment pause ending. Democrats have also been adamantly urging the president to extend the pause throughout all of 2022. On March 31st, prominent Democrats including Elizabeth Warren and Chuck Schumer all put pen to paper in a letter urging President Biden to make the extension.
Within its text, the Democratic leaders said that the student loan payment pause led to economic relief and prosperity for “millions of families” during the past few years. They also made note that it saved borrowers an average of $393 every month. Furthermore, they backed the claim that most borrowers were not financially prepared to start making payments again, citing skyrocketing costs, inflation, and gas prices as leading points.
Another chief concern amongst Democrats in Congress is the fear that lifting the student loan payment pause will only spike delinquency and defaults. A recent study from the California Policy Lab and the Student Loan Law Initiative backed this claim. They estimated that roughly one in three student loan borrowers were at high risk of struggling to make loan payments.
Republican members of the Grand Old Party feel much differently about the student loan payment pause. Virginia Foxx, a member of the House education committee said via Insider that the President’s perpetual extension of the student loan payment pause was simply a means to address his “sinking poll numbers.” Foxx and other Republican leaders look at the extension as another spending spree of hardworking taxpayer’s dollars. Republicans also worry that the President’s actions will pave the way for more blanket loan forgiveness that will further reach into the pockets of Americans.
Amid the fourth extension, the Biden administration is likely mulling over the idea of simultaneously canceling more debt for borrowers. According to a statement made by a White House official to Forbes, the president was still considering something he promised on the campaign trail to the office: broad student loan forgiveness of $10,000 per borrower. For a few more months, millions of debtors will be able to continue putting off payments to their student loans. But as of now, the student loan payment pause will expire on August 31, 2022. With no official word yet from the White House, mass student loan forgiveness remains off the table for now.